It's due to the return of 17.5 per cent Vat,a rise in petrol prices and a weak pound pushing up the cost of imports,that's if you believe the Governor of the Bank of England.
Or this is a worrying trend and the country could be returning to the dreaded 70's phenomena of stagflation,that's low growth and high inflation.
Today's inflation figures at 3.5 per cent forced an exchange of letters between BoE governor Mervyn King and Chancellor Alistair Darling.
According to the shadow chief secretary to the treasury,Philip Hammond "the figures will be worrying news for millions of families facing falling real incomes.
Mervyn King though appears not to be worried believing that the "blip" will return to normal by early summer.
The only good news is that inflation will help to reduce the fiscal deficit and will help those who now hold negative equities on houses.
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